The murder of George Floyd on May 25, 2020 at the hands of a Minneapolis police officer sparked outrage across the US, leading to protests and inspiring political pledges. American companies also responded, pledging $12 billion in financial commitments to address racial inequality and another $80 billion to support minority suppliers, according to Bloomberg surveys in 2020 and 2021.
The companies committed with diversity, equity and inclusion (DEI) initiatives, with which they intended their templates to more faithfully reflect the increasingly multiethnic population of the United States.
Four years later, some companies are backing away from these commitments, and the DEI is under attack by legal activists and political commentators who claim that these efforts discriminate against other groups, including white men who have historically held the highest positions in companies.
For its part, Supporters of diversity programs defend their initiatives by claiming that it is simply good business and benefits the bottom line.
Have employment opportunities changed?
Data suggests people of color have gained jobs in the US since 2020, but they have been scarce.
In the first year after Floyd's murder, S&P 500 companies added 323,094 net new workers, 94% of whom were black. The overall share of white people in this workforce slipped less than 2 percentage points to 52%. Data for 2022 and 2023 for these companies is not yet available.
Similarly, figures from the US Bureau of Labor Statistics between 2019 and 2023 showed that the proportion of all management positions held by black people increased to 9.2% from 7.8%. Black people, who make up about 14% of the total U.S. population, make up about 13% of the American workforce.
Still, blacks control a smaller percentage of American household wealth than they did four years ago: 3.4% at the end of 2023, compared to 4.3% at the end of 2019, according to the conclusions of the Federal Reserve. Although the global wealth of black and Hispanic households has doubled in the last 10 years, their share of the pie remains practically unchanged at 5.7%.
Does diversity improve results?
A series of McKinsey & Co. studies conducted between 2015 and 2020 found a statistically significant correlation between the profits of public companies and the racial diversity of their managers, but more recent research has questioned the durability and magnitude of those results.
Emphasizing the business case for diversity is increasingly resonant; A workforce full of people from different backgrounds helps a company avoid groupthink. Even many of those who oppose DEI policies agree with the benefits of having a broader set of knowledgealthough they disagree on how to obtain them.
Executives such as Jamie Dimon, CEO of JPMorgan Chase & Co. Jamie Dimon, CEO of JPMorgan Chase Co., have tried to frame DEI as an effort to exploit new markets, develop new sources of talent and invest in high-growth opportunities so that profits increase.
In a letter to shareholders in April, Dimon wrote that programs to finance entrepreneurs of color and to train and hire local talent in Detroit had helped the bank gain market share there, and would serve as a model for expansion elsewhere. “Our initiatives make us a more inclusive company and lead to more innovation, smarter decisions, and better financial outcomes for us and the broader economy,” she wrote.
What do critics say about DEI?
Mainly, they claim that DEI policies in the workplace have led companies to prioritize the hiring of women and certain people because of their race or sex, to the detriment of better qualified candidates.
For example, they point to companies that have adopted diversity hiring goals that they say resemble quotas, something that has long been illegal in U.S. labor law or They say scholarship and internship programs open only to certain groups offer an unfair advantage.
Some DEI critics say they want a more diverse workforce, but believe policies targeting specific groups are the wrong way to get there. They claim that the DEI has caused racial animosity inside and outside the office, and allege that black people are stigmatized as “diversity hires.”
What impact has the reaction had?
Although many US companies have taken a more cautious approach to DEI in their public statements, lMost of them say they remain committed to diversity in the workplace.
Mentions of “DEI” and “diversity” in earnings calls for companies in the Russell 3000 stock index had more than doubled in the quarters following Floyd's murder, but now they have returned to their 2019 frequency.
Some of this change can certainly be attributed to politics, but conservative legal activists may have had an even more tangible impact. Although the Supreme Court's June 2023 decision to strike down affirmative action applied to university admissions and not the workplace, A series of lawsuits and labor complaints have established that corporate policies are also under scrutiny.
Companies such as CVS Health Corp. or Delta Air Lines Inc. have removed or modified references to specific DEI metrics or objectives in their reports; bBanks like Goldman Sachs Group Inc. have opened programs targeting specific marginalized groups to everyone; and others, like Zoom Inc., have laid off DEI teams.
What do supporters say?
Many DEI advocates call these attacks efforts by white men to hold on to the power they have traditionally wielded in American society, pointing to still dramatic disparities in wages, wealth and assets among white men and disadvantaged groups.
They argue that targeted efforts remain crucial to level the playing field for black people and women.although it is debated whether the term DEI itself has become problematic.
The acronym has been used to describe too many things, from standardized hiring practices to unconscious bias training to investing in poor and minority communities, and its vagueness makes it easy to attack, they say.
Some companies have begun to emphasize the “I” in “inclusion,” sometimes using terms like “belonging” and “alliances,” in an effort to emphasize that their initiatives are for everyone, not just certain groups. Others maintain or increase their initiatives to remain competitive.
According to a Pew Research survey, most employees support efforts to increase diversity, equity and inclusion at work and, at least as of early 2023, were satisfied with the attention paid to these initiatives in their workplaces. job. About 56% of respondents said boosting DEI was a “good thing”while only 16% of workers thought it was “a bad thing.”
